13 October 2011

Fat Taxes

Things are never so simple, of course. The tax has already been received by many Danish firms as a 'bureaucratic nightmare', piling on additional costs to firms in an already tough period. Once more, any tax such as this is going to be inherently regressive; those least able to afford any price increases will be hit the hardest. But what does it matter? The French 'fat tax' is expected to raise an estimated €120,000,000 p.a.. A nice little earner.

Fat taxes are politically convenient in countries where obesity is a sizeable problem.  There is presumably plenty of revenue to be had because fat people aren’t going to change their eating habits overnight, nor are they the type to be particularly cost-conscious, in terms of both direct and indirect costs. 
Furthermore, defending fatties is political suicide for most, since fat people are generally reviled.  Thus, a fat tax is politically brilliant because it will raise revenue easily and enjoy widespread support (or, at the least, it won’t face much political opposition).
Most are in agreement that obesity is a society-wide problem. The more rotund we become, the more our healthcare costs increase. So what's the solution? Surely not pricing poor people out of the market for fatty foods. We must seek a solution other than 'more taxes' – the default position of any government. Perhaps our BMIs could be helped by making it easier for people to help out at sport clubs without undergoing a raft of CRB checks, or by reforming our health system which currently permits the cost of atrocious health habits to be picked up by someone else.
Sadly the precedent has already been set. When we already allow the government to dictate what we may and may not consume in the form of innumerable drugs, letting them control what we eat is a logical advancement. And it will all be done for our 'own good'. 

Actually, once you expect the government to provide free universal health care for every citizen (and all non-citizen residents), the natural consequence is for the government to enact some sort of cost-cutting measure, like rationing or queuing.  Alternatively, the government can enact a tax on unhealthy things in order to make providing health more reasonable.  If fat people ignore the increased prices, the government will at least have enough money to defray future health care costs that inevitably arise as a result of unhealthy diet.  Alternatively, if fat people decide to respond to the tax rationally, then the government will have to pay less for health care later on, thus negating the effect of less-than-projected revenue.

In many ways, a fat tax mimics the natural workings of the free market.  If there were no governmental guarantees of health care, people would more inclined to take care of themselves and eat properly.  Thus, the fat tax serves as a replacement market mechanism.

Now, this is not to say that I support a fat tax.  I simply view it as the rational response to the current conditions in Europe, with regards to how health care is provided over there.  Personally, I think the best solution would be to have the government completely deregulate and desubsidize the entire health industry, and get out of providing and paying for health care in its entirety.  But if the government is going to be involved in health care, it is going to have to find a way to manage costs.  That much is certain.

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